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ERA says major retailers may drop music if public performance licence costs aren’t reduced

By | Published on Wednesday 10 February 2016

Entertainment Retailers Association

The Entertainment Retailers Association has raised concerns that rising public performance licence costs are hindering the businesses that are trying to help the music industry sell more of its music, to the extent that non-specialists might withdraw from selling records completely.

These concerns are being raised now, because the retailers are particularly annoyed that the previously reported incoming joint PPL/PRS licence, which will make public performance licensing more efficient in the UK, will not pass cost savings on to the licensees.

Record shops, like most other places of business, require licences from collecting societies PPL and PRS For Music to play music over a stereo system. This has always been a bone of contention for music sellers because, unlike most other places of business, they are playing music in an attempt to sell it.

“This is very different, for instance, to commercial radio stations who play music to sell advertising or bars who play music to sell alcohol”, says ERA in a blog post. “Music retailers use music predominantly to sell music. And naturally any sales they generate typically benefit rights owners far more than they do the retailer”.

It continues: “Many ERA members have reported [public performance] fees which have risen at more than double the rate of inflation over the past decade. The level of licence fees charged to the bigger chains and supermarkets in particular seem excessive, and in many cases these fees can completely wipe out any retail profit on music sales”.

The trade body says that hopes were raised by the news of the new joint licence that there would be some reduction in costs. “Unfortunately not”, continues the statement. “A PRS and PPL spokesman was swift to quash any such suggestion. Any cost savings we must assume therefore will be kept by the PRS and PPL”.

“Which rather cuts to the heart of the whole issue”, it adds. “In competitive markets, when cost savings become available they are invariably passed on to consumers (ERA members do it all the time). But PRS and PPL do not of course operate in competitive markets. They are effectively monopolies”.

“It would be a shame if the announcement of what by any measure is a progressive move – the coming together of PRS and PPL to bring new efficiency to public performance licensing – were to become a catalyst for some major retailers to give up on music entirely”, it threatens in conclusion.

A spokesperson for PRS For Music and PPL told CMU: “It was always our intention for the proposed joint venture that, by creating a single point of contact for our UK public performance customers, it would allow us to significantly simplify music licensing for UK businesses. It is in our licensees’ interests to ensure that our licensing is ever more efficient but, importantly, it is also in our respective members’ best interests as well whose work lies at the very heart of the success of the British music industry”.



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